Saturday, March 20, 2010

Times says ACORN on the brink of bankruptcy, ignores Forest City Ratner bailout

Less than a month after news broke that ACORN's New York affiliate had re-established itself as New York Communities for Change (with many of the same staffers), the New York Times reports that Acorn on Brink of Bankruptcy, Officials Say.

Most of the blame goes to the heavily-edited "sting" videos, though no criminal wrongdoing was found on the part of ACORN staffers who gave advice to a self-described pimp and prostitute:
After the activists’ videos came to light and swiftly became fodder for 24-hour cable news coverage, private donations from foundations to Acorn all but evaporated and the federal government quickly distanced itself from the group.

The Census Bureau ended its partnership with the organization for this year’s census, the Internal Revenue Service dropped Acorn from its Voluntary Income Tax Assistance program, and Congress voted to cut off all grants to the group.

A network that once included more than 1,000 grass-roots groups, Acorn, which stands for Association of Community Organizations for Reform Now, was created in 1970 and has fought for liberal causes like raising the minimum wage, registering the poor to vote, stopping predatory lending and expanding affordable housing.

But long before the activist videos delivered what may become the final blow, the organization was dogged for years by financial problems and accusations of fraud.
In the summer of 2008, infighting erupted over embezzlement of Acorn funds by the brother of the organization’s founder.
Actually , the Times lightly treats the embezzlement by the brother of ACORN founder Wade Rathke, given that the "infighting erupted" because the embezzlement had been covered up for nearly a decade.

What about Forest City Ratner

And the Times article today completely ignores the $1.5 million loan/gift bailout of the national organization by developer Forest City Ratner.

But if Forest City Ratner can't meet its mortgage payment on a property at MetroTech, it's not likely to support ACORN any more. In fact, if ACORN files for bankruptcy, it will get protection from its creditors, and won't be able to pay back the onerous--if delayed--18% interest rate on the loan component, $1 million.

ACORN has served its purpose for Forest City Ratner, so the investment was not imprudent. Still, we now have another clue to explain why ACORN head Bertha Lewis, often front-and-center at Atlantic Yards events, was not given a role at the podium during the March 11 groundbreaking.

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